Dive Brief:
- Hershey's fourth-quarter sales dropped 5% to $1.91 billion on a 27% decrease in international revenue.
- Sales in North America grew 0.2% to $1.63 billion after the company introduced new and revamped products for the holiday season. The previous quarter's U.S. sales missed analysts' estimates.
- Quarterly earnings increased from 91 cents per share to 98 cents per share year over year, an abrupt change from a 31% profit plunge last quarter.
Dive Insight:
Hershey struggled in the Chinese market, where revenue fell 34% year over year, as Chinese consumers tend to eat less chocolate than consumers in North America and Europe. In 2014, Hershey acquired candy company Shanghai Golden Monkey, but was riddled with distribution and payment collection issues.
Hershey continues to innovate, which could be a contributing factor to its sales improvement this past quarter. The company introduced Hershey's Kisses Deluxe, which expanded Hershey's footprint in the fast-growing premium chocolate category. Hershey's milk chocolate bars and Kisses debuted with no artificial flavors at the end of last year.
Hershey's Holiday Kisses became the first product to bear the Grocery Manufacturers Association's new SmartLabel, a scannable QR code that directs consumers to more off-label product information. As transparency becomes increasingly important to consumers, more manufacturers are adopting the label.
Chocolate is among consumers' top five favorite comfort foods, but Hershey has also bought into other market segments. Last year it acquired jerky maker Krave.